Reality of Risk
Managing a World of Risk
We live in a world of constant and exciting change. Indeed, rapidly advancing technology means that life moves at a lightning-fast pace, as virtually everything we do — from our motor vehicle registration to our retirement investing — is recorded in bits and bytes, rather than pen and ink.
Clearly, information is critical in this modern digital age, and for companies operating in this data-rich environment, protecting that information can mean the difference between incredible success and considerable struggle. Oftentimes, the failure to adequately protect such data can impact their very business survival.
Additionally, corporate officers are now ultimately responsible for protecting their organization’s vital records. Legislation such as Sarbanes-Oxley and HIPAA has attached large fines and even criminal penalties of up to 10 years in prison for failing to protect vital business documents, medical records and digital media. Rule 26 of the Federal Rules of Civil Procedure mandate the expedient response to information requests in the discovery process, whether that information is in digital or hardcopy format. Failure to produce the required information will result in a summary judgment against the negligent organization — potentially costing millions in compensatory damages and punitive fines.
In a tangible sense, companies must be aware of the many physical forces that can damage, if not completely destroy their data, and take steps to protect themselves from these potential threats. It doesn’t take a catastrophic fire to destroy computer media and other valued records; fluctuation in temperature or humidity, dust particles and UV light can be just as dangerous and ultimately as devastating.
Indeed, the old model of storing records in warehouses suitable for storing warehouse commodities is no longer acceptable, especially for electronic records. This is especially true against the backdrop of recent media headlines and courtroom rulings that hold corporate officers legally and financially accountable for protecting and producing their company’s vital records.
CEO’s and Boards of Directors must recognize their responsibility to protect the records that reflect their good stewardship. Furthermore, they must come to understand that successfully managing the modern world of risk means that vital information must be protected, while remaining accessible at a moment’s notice.